According to Wedbush Securities, Nvidia (NVDA, Financial) and Microsoft (MSFT) are spearheading the AI revolution, with new evidence suggesting that the AI infrastructure market could grow tenfold by 2027.
Dan Ives, an analyst at Wedbush, highlighted that under the leadership of Nvidia's Jensen Huang, the demand for AI chips within the supply chain has reached unprecedented levels. As AI use cases proliferate across enterprises, this demand is expected to trigger a wave of corporate spending. Ives estimated that AI capital expenditure could reach $1 trillion over the next three years.
Ives noted that AI-related spending is driving a significant portion of tech supply chain expenditures. Generative AI projects are being regularly launched within companies, signaling that AI-related initiatives will occupy a prominent place in 2025 IT budgets, unlocking numerous new AI use cases.
While Nvidia and Microsoft are currently at the core of AI advancements, other tech giants are also joining the AI movement, including Oracle (ORCL), ServiceNow (NOW), Palantir (PLTR), Salesforce (CRM), Dell (DELL), IBM (IBM), Apple (AAPL), and AMD (AMD). Ives believes that as the AI-driven tech bull market advances, tech stocks could rise by over 10% by the end of the year and another 20% by 2025.
Ives also pointed out that for every dollar spent on Nvidia GPUs, there is an $8 to $10 multiplier effect across the tech industry. While Nvidia has reshaped the global landscape with its GPUs, AMD and other companies are catching up, aligning with the anticipated $1 trillion surge in AI capital spending over the coming years.
Survey results indicate that enterprise-level AI demand is entering a new phase as AI use cases explode across various business sectors.
